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SUN-TIMES MEDIA GROUP, INC.
KEY EMPLOYEE SEVERANCE PROGRAM
 PARTICIPATION AGREEMENT
     1. Termination
 a.
    
    Nothing in this Agreement shall limit or restrict the ability of the
Company to terminate the employment of Participant, and no contract of employment
is intended or created hereby or by Participants participation in the Program.
The employment of Participant may be terminated in any of the following ways: (i)
as a result of death or permanent disability of the Participant; (ii) by the
Company for Cause (as defined herein), (iii) by the Participant other than for
Good Reason (as defined herein), (iv) by the Company other than for Cause or as a
result of death or permanent disability (a Company Termination), or (v) by the
Participant for Good Reason (hereinafter defined) (a Good Reason Termination).
The payments and benefits provided for in this Agreement shall be made to
Participant only in the event of a Company Termination or a Good Reason
Termination.b.
    
    In the event of a Company Termination or a Good Reason Termination,
the terminating party shall be required to provide the other party with not less
than fourteen (14) calendar days advance written notice of termination. The
Company shall have the right, in its sole discretion, to
require the Participant to remain employed by the Company for a period of




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up to
thirty (30) days following notice of termination by either party, as a condition to
Participants receipt of the payments and benefits provided hereunder.
 2. Payments and Benefits Upon Termination
 a.
    
    A lump sum payment (payable within ten (10) days of termination) for
any accrued, unused vacation time, reduced by all applicable tax withholding
requirements.b.
    
    A lump sum payment (payable within ten (10) days of termination)
equal to the (A) higher of (i) fifty percent (50%), or (ii) the percentage derived
by taking the period of January 1 through December 31 and calculating the number
of days the Participant is employed by the Company during the current calendar
year (to the termination date) on a percentage basis, multiplied by (B) the higher
of (x) twenty-five percent (25%) of Participants base salary, or (y) the most
recent annual bonus paid to Participant within the twelve month period preceding
the date of termination; andc.
    
    An amount equal to the Participants base salary in effect on the
date of termination, payable in twenty-six (26) bi-weekly installments in the same
manner that the Participants payroll is currently handled, less all appropriate
withholding amounts and deductions; andd.
    
    Continuation of all then-current benefit programs in which the
Participant is entitled to participate on the date of Participants termination of
employment, subject only to Participants continued premium contributions at the
same level as on the date of termination. In the event that Participant is
precluded by the terms of such programs or by law from participation following
termination of employment, the Company shall provide an equivalent benefit in the
manner it deems appropriate.
 3. Definitions
 a.
    
    Cause shall mean (i) Participant engaging in intentional and
willful misconduct, including a breach of the Participants duty of loyalty to the
Company, to the detriment of the Company, or (ii) Participant being convicted of,
or plea of nolo contendereto, a crime involving fraud, dishonesty, inappropriate
moral standards, or violence.b.
    
    Good Reason shall mean the occurrence of both a Change of Control
andthe Participant experiencing (i) a material reduction in title, authority or
responsibilities, (ii) Participant being required to relocate more than
fifty (50) road miles from the office where Participant currently works, or
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(iii) the failure of the Company to obtain an explicit undertaking from any successor to
honor the terms of this Severance Program. For a Good Reason Termination to be
valid, the affected Participant must give notice to the Company of the reasons
giving rise to the Good Reason and provide the Company ten (10) days to cure said
Good Reason. In addition, the Company must be notified of a Good Reason
Termination within six (6) months of the effective date of the action giving rise
to the cause of the Good Reason.c.
    
    A Change in Control will be deemed to occur upon:
 1.
    
    the acquisition after the date of this Agreement
by any person (as defined in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the Exchange Act)
(excluding for this purpose, (i) STMG or any subsidiary of STMG or (ii)
any employee benefit plan of STMG or of any subsidiary of STMG or any
person or entity organized, appointed or established by STMG for or
pursuant to the terms of any such plan which acquires after the date of
this Agreement beneficial ownership of voting securities of STMG) of
ownership of securities of STMG whereby such person becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly of securities of STMG representing more than
fifty percent (50%) of the combined voting power of STMGs then
outstanding securities; provided, however, that no Change in Control
will be deemed to have occurred as a result of a change in ownership
percentage resulting solely from an acquisition of securities by STMG;
or2.
    
    John F. Bard, Cyrus F. Freidheim, Jr., John M.
OBrien, Gordon A. Paris, Graham W. Savage, Raymond G. H. Seitz, and
Raymond S. Troubh (collectively, Incumbent Directors) and any new
directors whose election by the Board of Directors or nomination by the
Board of Directors for election by STMGs stockholders was approved by a
vote of a least two-thirds (2/3) of the directors then still in office
who either are Incumbent Directors or whose election or nomination for
election was previously so approved (such new directors being referred
to as Successor Incumbent Directors) ceasing for any reason to
constitute at least a majority of the Board of Directors; or3.
    
    the adoption, enactment or effectiveness of any
action (including, without limitation, by resolution or by amendment to
STMGs charter or bylaws) that materially limits or diminishes the power
or authority of STMGs board of directors or any committee thereof, if
such action has not been approved by a vote of a least
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two-thirds (2/3) of the directors then still in office who either are
Incumbent Directors or Successor Incumbent Directors; or4.
    
    the consummation of, or the execution of a
definitive agreement the consummation of which would result in, a
reorganization, merger or consolidation, or sale or other disposition of
all or substantially all of the assets of STMG (a Business
Combination), in each case, unless, following such Business
Combination, all or substantially all of the individuals and entities
who were the beneficial owners of outstanding voting securities of STMG
immediately prior to such Business Combination beneficially own,
directly or indirectly, more than fifty percent (50%) of the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors of the entity resulting from such
Business Combination (including, without limitation, an entity which, as
a result of such transaction, owns STMG, or all or substantially all of
STMGs assets, either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior
to such Business Combination, of the outstanding voting securities of
STMG; or5.
    
    the consummation of a complete liquidation or
dissolution of STMG.
 4. Information and Confidentiality
 5. Return of Company Property
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6. Release Exhibit A
 7. Acknowledgment; No Admission; Confidentiality
 a.
    
    Upon termination, Participant will represent and warrant to the
Company that: (a) he or she has no pending claims against the Company, STMG or any
of STMGs subsidiaries or affiliates with any municipal, state, federal or other
governmental or non-governmental entity; and (b) that Participant will not file
any claims with respect to any events occurring on or before the date of
termination. Participant will also acknowledge and agree that by entering into
this Agreement he or she may never make claim or demand upon or sue the Company,
STMG or any of STMGs subsidiaries or affiliates for any reason whatsoever
relating to anything that has happened through the date hereof.b.
    
    Both the Company and Participant acknowledge and agree that this
Agreement does not constitute, is not intended to be, and shall not be construed,
interpreted or treated in any respect as, an admission of liability or wrongdoing
by either party for any purpose whatsoever. Further, each of the Company and
Participant acknowledges and agrees that there has been no determination that
either party has violated any federal, state or local law, statute, ordinance,
guideline, regulation, order or common-law principle.c.
    
    Each of the Company and Participant agrees that the terms of this
Agreement shall be strictly confidential. Participant further agrees that he or
she will not disclose the terms of or the amount paid under this Agreement to any
other person or entity, other than his or her immediate family, attorney,
accountant and tax preparer, unless required by law to do so or expressly
authorized to do so in writing by the Company.
 8. Arbitration of Disputes; Payment of Expenses
 a.
    
    Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled by arbitration proceedings
conducted in accordance with the commercial rules of the American Arbitration
Association (the AAA) as then in effect. The arbitrator shall be selected by
joint agreement of the Company and Participant, but if such agreement is not
reached within seven (7) days of the date of the request for arbitration, the
selection shall be made by the AAA in accordance with its commercial rules.
Judgment upon any award rendered by the arbitrator may be entered in any court
having jurisdiction. The costs and expenses of the arbitrator and all costs and
expenses of experts, attorneys, witnesses and other parties reasonably incurred by
the prevailing party shall be
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borne by the party that does not prevail in such arbitration or in any court
proceeding relating to enforcement of this Agreement.b.
    
    The existence and execution of this Agreement shall not be
considered, and shall not be admissible in any proceeding, as an admission by the
Company of any liability, error, violation or omission. Participant acknowledges
that nothing contained in this Agreement or any other agreement or instrument
delivered by the Company to Participant shall constitute an admission that the
Company is in any way liable to Participant or has in any way violated any law.
Participant further acknowledges that no precedent, practice, policy or usage
shall be established by this Agreement or the Companys offer of benefits herein.c.
    
    Each party will bear its own expenses incurred in the preparation,
review and approval of this Agreement, including, without limitation, legal,
accounting, tax advisory or other similar fees and expenses.
 9. Non-solicitation
 10. Governing Law
 11. Consideration and Revocation
 12. Cooperation
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IN WITNESS WHEREOF
 SUN-TIMES MEDIA GROUP, INC.By:
    
    /s/ Gregory L. PowellName:
    
    Gregory L. PowellTitle:
    
    VP, Human Resources/s/ John J. MartinJohn J. Martin
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EXHIBIT A
 WAIVE RELEASE
 Release of Age Discrimination Claims et seq.
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